Australian Dollar Searching for Bottom

Another day of trading the Australian Dollar… plenty of action for day traders. The Aussie spent the day searching for a bottom. The chart is a 2 day 1 minute chart. After falling sharply from highs of 7980 the dollar is falling back to a reasonable price. Plenty of opportunities to short the dollar over the past day or so. Earlier today the dollar bounced off its current support - around the 7810’s 7820’s… and right now - at 7pm Sydney time it is in a trading range between 7820/40. The dollar fall seems to have lost momentum over the past 24 hours so the Australian dollar is now seaching for the bottom which could be where it is now. If you are bullish, time to go long, if you think the dollar can still break current support then go short.Some traders reckon the dollar can recover by next week back up to 79 cents. If the economic data released next week is conducive then there is a high probability that it will. The main fundamental cause for the Aussie dollar declaine is the stronger US dollar which was energised by a rise in inventories and an increase in November of the US non-manufacturing index. However in New York trade later tonight, the December non-farm payrolls will be released - might send the dollar moving again. The Australian dollar hit a low ofUS$0.7813 cents today.

Local Australian data to watch out for next week: November building approvals at 11.30 Sydney time. (Economists say they expect a 2 percent rise which compares to a fall of 7.5 percent in October 2006. Next Thursday is December’s employment data, which may influence the Reserve bank’s rate decision on the 7th of February.